National and guarantee pensions

The national pension and the guarantee pension secure the pensioner’s income if their earnings-related pension is small or they have not earned an earnings-related pension at all. The national pension benefits are:

  • the old-age pension,
  • the disability pension,
  • the survivors’ pension (for the surviving spouse and the children), and
  • the rehabilitation benefits.

In addition, the pensioner will get a guarantee pension if their total pension is below the amount of the full guarantee pension.

A pensioner may also get a housing allowance, a pensioner’s care allowance and a child increase. The surviving spouse may also get a housing allowance in addition to the surviving spouse’s pension.

War veterans with a service badge may get a regular and an additional front-veterans’ supplement.

The Social Insurance Institution (Kela) pays the national pension and the guarantee pension.

Approximately 50 per cent of all pensioners get a national pension. The level of the full national and guarantee pension is nearly 25 per cent of the average earnings of Finnish wage earners. The number of pensioners getting a national pension has reduced as a result of legal amendments and an increase in the level of the earnings-related pension.

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Pension amount

The national pension and the earnings-related pension are integrated into one total pension. Each euro of the earnings-related pension reduces the full national pension by 50 cents, until the earnings-related pension reaches such a level that the national pension is no longer granted.

Full national pension (€/month) in 2018

Full national pension Earnings-related pension which no longer entitles to a national pension
Single retiree

628.85

1,299.88

Married or cohabiting retiree

557.79

1,157.71

Source: The Social Insurance Institution

When calculating the national pension, the following pension income is also taken into account:

  • a voluntary pension arrangement paid by the employer,
  • a reduction for early retirement of the old-age pension of the earnings-related pension scheme (when calculating a survivors’ pension, the reduction for early retirement of the deceased person is not taken into account),
  • a partial reduction for early retirement of the earnings-related pension,
  • the MYEL component included in the farmers’ early retirement aid, and
  • compensation based on the Workers’ Compensation Insurance Act, the Motor Liability Insurance Act and the Military Injuries Insurance Act, but not any related lump-sum increases.

However, when calculating the national pension, the following do not constitute pension income:

  • the own-right pension accrued at a rate of 4.5 per cent before the year 2017 (pension accrued from work at a rate of 4.5 per cent included in the survivors’ pension is taken into account),
  • the child increase of the earnings-related pension,
  • the rehabilitation increment of the earnings-related pension,
  • the increment for deferred retirement of the earnings-related pension  (also when included in the survivors’ pension)
  • the pension accrued during studies and periods of caring for one’s own child under the age of 3 (the Act on Compensation from State Funds for Pension Accrual for Periods of Childcare and Periods of Study, VEKL; also when included in the survivors’ pension),
  • the lump-sum increment to the disability pension paid after five years on a disability pension (also when included in the survivors’ pension).

In the surviving spouse’s pension in the national pension scheme, the above-mentioned parts of the surviving spouse’s own pension are not considered income of the surviving spouse. However, the pension components listed above that are included in the survivors’ pension that the surviving spouse gets are considered income, with the exception of the component accrued under VEKL and the deceased person’s lump-sum increment.

If a person who gets a partial old-age pension gets an early old-age pension or an old-age pension from Kela, the amount of the national pension is affected by the part of the old-age pension not taken early and the difference between the projected old-age pension (total pension accrued by the time the individual reaches their retirement age) and the partial old-age pension.

Under certain conditions, pensions and other benefits paid from abroad reduce the amount of the national pension. An earnings-related pension paid from an EU Member State reduces the amount of the national pension in the same way as the Finnish earnings-related pension does when the EU Regulation on social security (883/2004) is applied.

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Conditions for getting the national pension

The national pension may be granted to a person who lives in Finland and who has lived in the country for at least three years after reaching the age of 16. If necessary, insurance periods earned in other countries are taken into consideration when the EU Regulation on social security (883/2004) is applied.

If the residence requirements are met but the applicant or the deceased has lived in Finland for less than 80 per cent of the time between the age of 16 and the start of the pension, the national pension and the survivors’ pension are proportioned to the length of time that the individual has lived in Finland. Under certain conditions, pensions and compensations from abroad reduce the amount of the national pension.

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Old-age pension under the national pension scheme

The retirement age in the earnings-related pension scheme depends on the individual’s yar of birth. In the national pension scheme, the retirement age is 65 years. Once the retirement age in the earnings-related pension scheme has risen to 65 years, the retirement age in the national pension scheme will rise along with the retirement age of the earnings-related pension scheme.

In the national pension scheme, an individual can retire on an early old-age pension at the age of 63 years. In that case, the monthly pension will be reduced by 0.4 per cent for each month from the month in which the pension is taken out to the month in which the individual reaches their retirement age. For example, if an individual retires on an earnings-related pension at age 63 and wants to get the national pension at the same time, it will be an early old-age pension. Those born between 1958 and 1961 can retire on an early old-age pension at age 64 at the earliest. The early old-age pension will be abolished as of the generation whose retirement age under the earnings-related pension scheme is 65 years.

If the old-age pension is postponed to begin later than the beginning of the month following the individual’s 65th birthday, the national pension will be increased by 0.6 per cent for each month. The increase is calculated for each month that the pension is postponed. The pension can be postponed for an unlimited number of months. However, the national pension is not increased for the months for which the applicant is not entitled to a national pension after the age of 65 (for example, because they live abroad).

The rates for the reduction for early retirement and the increment of deferred retirement differ from each other in the earnings-related and the national pension scheme.

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Kela: Old-age pension

Disability pension for persons aged 16-64 years

Persons aged 16-64 years may apply for a disability pension, which is awarded either until further notice or as a cash rehabilitation benefit for a fixed period of time. As a rule, the national pension is granted at the same time as the earnings-related pension, but there are differences in age limits. An individual cannot get an earnings-related pension before the age of 17 and the earnings-related pension is granted as an old-age pension after the individual reaches their retirement age.

Income during short-term illnesses and rehabilitation is secured through the sickness and the rehabilitation allowances paid by Kela until the age of 68.

It is not possible to get a partial disability pension under the national pension system (unlike under the earnings-related pension system).

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Kela: Disability pension and rehabilitation subsidy

Early old-age pension to the long-term unemployed

Individuals born before 1958 who have been unemployed for a long time and who are entitled to additional days of the unemployment allowance can get a full national and  earnings-related old-age pension as of age 62. For those born between 1958 and 1961, teh age limit is 64 years. Those born in 1962 or later are not entitled to a full old-age pension before they reach their retirement age.

Unemployment pensions are no longer granted. The unemployment security has transferred from the pension system to the unemployment security system.

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Kela: Old-age pension for long-term unemployed

Survivors’ pension for the surviving spouse and the children

Surviving spouse’s pension

The survivors’ pension is paid only to a surviving spouse who is under the age of 65. In all other respects, it is granted under the same conditions as in the earnings-related pension scheme.

The surviving spouse’s pension consists of a starting and a continuing pension. The surviving spouse is entitled to a starting pension for six months after the death of the other spouse. The starting pension is of a fixed amount, regardless of the surviving spouse’s earnings or wealth.

If the surviving spouse does not care for their own or the deceased spouse’s child under the age of 18, and depending on the surviving spouse’s earnings, the continued pension paid consists only of the additional amount. Half of the full additional amount is paid if the surviving spouse’s monthly gross earnings exceed 55.54 euros. The surviving spouse’s pension is not paid if the monthly gross earnings exceed 1,1096.71 euros (in 2018; €954.55/month if the surviving spouse is married).

If the surviving spouse cares for a child under the age of 18, the monthly continuing pension is at least the basic amount (€101.59). Depending on the surviving spouse’s earnings, an additional amount may be paid. The surviving spouse’s pension is not paid if the monthly gross earnings exceed 1,110.05 euros (in 2018; €967.88/month if the surviving spouse is married).

Orphan’s pension

The orphan’s pension is paid to the deceased person’s own or adopted child, or a child who was cared for by the deceased, as long as the child is under 18 years of age. If the child is a full-time student between the ages of 18 and 20, the child can apply for a so-called student’s pension from Kela. The student’s pension includes only the basic amount of the orphan’s pension. If both parents or guardians of the child are dead, an orphan’s pension is paid after them both separately.

The orphan’s pension consists of the basic amount (€59.68/month), regardless of the child’s earnings, and the additional amount (€90.26/month) if the total monthly survivors’ or assistance pension paid by others than Kela is less than 236.05 euros.

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Kela: Survivor benefits

Guarantee pension

The guarantee pension improves the economic welfare of low-income pensioners. If the pensioner’s total gross national and earnings-related pensions amount to less than the lower pension income level stated in the law, the difference is paid in the form of a guarantee pension. In 2018, the gross pension income limit for the guarantee pension is 775.27 euros.

Slightly over 100,000 pensioners, or approximately 8 per cent of all pensioners, get a guarantee pension.

The following qualify for a guarantee pension:

  • a person who has turned 62 and gets an old-age pension or an early old-age pension,
  • a person who has turned 16 and gets a disability pension,
  • a person who gets a pension from the system based on the act on Farmers’ Early Retirement Aid,
  • a disabled immigrant who has turned 16, and
  • an immigrant who has turned 65.

If the old-age pension has been granted as an early old-age pension, the guarantee pension is reduced by the amount of the reduction for early retirement.

Other pension income reduces the guarantee pension to their full amount. Pension income as a reducing factor is taken into consideration more extensively in the guarantee pension compared to in the national pension.

A person’s family status does not affect the amount of the guarantee pension: A full guarantee pension is always the same regardless of whether the person in question is married, single or living in a domestic partnership. Only pension income affects the amount of the guarantee pension.

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